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INCOME TAX ASSESSMENT ACT 1936 - SECT 121EF Definitions relating to allowable deductions of an OBU

INCOME TAX ASSESSMENT ACT 1936 - SECT 121EF

Definitions relating to allowable deductions of an OBU

Purpose of section

  (1)   This section sets out certain definitions used in this Division   relating to allowable deductions of an OBU in relation to a year of income.

Allowable OB deduction

  (2)   An allowable OB deduction is any of the following 3 kinds of allowable deduction:

  (a)   an exclusive OB deduction;

  (b)   a general OB deduction;

  (c)   an apportionable OB deduction.

Exclusive OB deduction

  (3)   An exclusive OB deduction is any deduction (other than a loss deduction) allowable from the OBU's assessable income of the year of income that relates exclusively to assessable OB income.

General OB deduction

  (4)   A deduction that:

  (a)   is none of the following:

  (i)   a loss deduction;

  (ii)   an apportionable deduction;

  (iii)   an exclusive OB deduction;

  (iv)   an exclusive non - OB deduction; and

  (b)   is allowable from the OBU's assessable income of the year of income;

is a general OB deduction to the extent that:

  (c)   it is incurred in gaining or producing the OB income of the OBU; or

  (d)   it is necessarily incurred in carrying on a business for the purpose of gaining or producing the OB income of the OBU.

Apportionable OB deduction

  (5)   An apportionable OB deduction is so much of any apportionable deduction allowable from the OBU's assessable income of the year of income as is calculated by multiplying the deduction by the following fraction:

    Start formula start fraction OBU's assessable OB income minus open bracket OBU's exclusive OB deductions plus OBU's general OB deductions close bracket over OBU's taxable income plus OBU's apportionable deductions end fraction end formula

Exclusive non - OB deduction

  (6)   An exclusive non - OB deduction is any deduction (other than a loss deduction) allowable from the OBU's assessable income of the year of income that relates exclusively to assessable income that is not assessable OB income.

Loss deduction

  (7)   A loss deduction is any allowable deduction under Division   36 of the Income Tax Assessment Act 1997 .

Subdivision   C -- Operative provisions

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